Founder of Gotbit Admits to Committing Crypto Fraud
Aleksei Andriunin, the founder of the cryptocurrency firm Gotbit, has admitted to engaging in activities related to wash trading and has been sentenced to serve two years in prison for his actions. This case highlights the ongoing issue of fraud within the crypto space and the measures authorities are taking to address it.
The charges against Andriunin stem from accusations that he manipulated crypto token prices to benefit clients. While the potential combined sentence for these charges could have been up to 25 years, he reached a plea deal with US prosecutors that will see him spending no more than two years behind bars. Additionally, he has agreed to pay approximately $23 million in fines using crypto stablecoins.
In the indictment against Gotbit last October, US government prosecutors alleged that the firm provided market manipulation services to its clients, utilizing wash-trading techniques to artificially inflate the volume and price of tokens. The goal was to have these tokens listed and traded on major crypto exchanges. Andriunin was arrested in Portugal on October 8 and extradited to the United States on February 25, 2025, to face his charges.
In a 2019 interview, Andriunin revealed details about his scheme, explaining how he used bot trading to generate false trade volume and secure a spot on CoinMarketCap for a project. Two other employees of Gotbit, Qawi Jalili and Fedor Kedrov, have also been indicted for their involvement in explaining the wash trading scheme to clients and helping them avoid detection.
Andriunin’s guilty plea comes amidst a wave of fraud investigations in the crypto sector in recent years. The case of Shan Hanes, the former CEO of Heartland Tri-State Bank, who embezzled funds leading to the bank’s collapse and investor losses, is one example. Another case involves Hyungsoo Lee, CEO of Haru Invest, and two other executives who were charged with misappropriating customer funds from 2020 to 2023.
These cases underscore the importance of due diligence and caution in the cryptocurrency market, as fraudsters continue to exploit the lack of regulation and oversight in the industry. As the regulatory landscape evolves, it is crucial for investors and participants in the crypto space to remain vigilant and informed to protect themselves against such fraudulent activities. The sentencing of Andriunin and ongoing investigations serve as a warning to others who may seek to engage in illegal activities within the crypto sector.
